The Fair Work Ombudsman has secured near-record penalties of
$447,300 against the operators of a Sydney-based cleaning company,
with the Federal Court finding the company treated vulnerable
employees as "slaves" under a "calculated" scheme.

Grouped Property Services Pty Ltd has been penalised $370,000
and also ordered to back-pay $223,244 to 49 employees it exploited
between 2011 and 2013.

Rosario Pucci - the former owner-operator of the company
described by the Court as being "intimately involved" in the
exploitation - has been penalised a further $74,300.

His brother Enrico Pucci, the company's current owner and sole
director, has been penalised $3000 for his involvement in
contravening the adverse action provision of the Fair Work Act that
makes it unlawful to dismiss an employee for exercising a workplace
right, such as inquiring about payment of wages.

Fair Work Ombudsman Natalie James said the case was one of the
agency's most complex matters.

"This matter involved dubious 'labour hire' arrangements,
corporate structures and sham contracting arrangements that were
used by a second time offender in a calculated attempt to avoid
responsibility for vulnerable workers' entitlements," Ms James
said.

In 2011, the Fair Work Ombudsman secured $4400 in Court-issued
fines against Rosario Pucci for his involvement in underpaying
three employees - but Mr Pucci's company Wash and Go Pty Ltd was
placed into liquidation, preventing the Fair Work Ombudsman from
securing penalties against it.

At the commencement of the 2014 litigation against Grouped
Property Services, the Fair Work Ombudsman secured a freezing
order, preventing the company from being stripped of assets or
placed into liquidation, which would have frustrated back-pay
orders.

In the latest litigation, the Court found Grouped Property
Services deliberately exploited 51 workers, many from non-English
speaking backgrounds. Most were engaged as cleaners, but some
worked in clerical and other roles. They were individually
underpaid amounts ranging from $58 to $23,474.

Grouped Property Services claimed that the 51 workers were
employed by a purported labour-hire company National Contractors
Pty Ltd. National Contractors was registered at the Grouped
Property Services business address.

The Fair Work Ombudsman proved in Court that Grouped Property
Services was the true employer of the workers and that National
Contractors was merely a shell company set up by Grouped Property
Services to avoid paying employees the minimum Award wages and
entitlements that applied to their positions.

Instead, Grouped Property Services required workers to obtain
ABNs and submit invoices for payment and then paid the workers
arbitrarily determined low flat rates that undercut Award minimums
- or in some instances paid them nothing at all.

Three other purported labour hire companies that had formerly
been registered at the Grouped Property Services business address
had previously gone into liquidation.

Ms James welcomed the judgment and the freezing orders secured
against Grouped Property Services saying it ought to be a warning
to others who might seek to use complicated corporate structures to
avoid their lawful obligations to their workers.

"We are pleased that the court has seen through these structures
and held the individuals responsible to account. The freezing
orders we obtained earlier to prevent Grouped Property Services
from transferring assets will also play a critical role in ensuring
these workers receive their unpaid wages and the court penalties
are paid," Ms James said.

Justice Anna Katzmann described the exploitation of the 51
employees as "serious", finding that the contraventions were
deliberate and part of a "scheme".

"It was the result of a calculated attempt to avoid paying
minimum award rates and statutory entitlements," Justice Katzmann
said.

Many of these employees were foreign nationals on temporary
visas. Many had limited English language skills and were unlikely
to have been familiar with Australian labour laws.

"Many, if not all, were struggling financially. Several had been
unemployed for some time before securing work with the company.
Some were treated by Grouped Property Services as slaves.

"On several occasions employees were dismissed for having the
temerity to insist on receiving what they perceived to be their
outstanding wages (substantially less than their due) before doing
any more work," Justice Katzmann said. "It is self-evident that
Grouped Property Services profited from its exploitation of these
employees," Justice Katzmann said.

Justice Katzmann found that the conduct caused the employees
"considerable hardship", with some giving evidence that
underpayments caused them mental, emotional and financial stress
and anxiety.

"(One employee) was supporting her partner who was undergoing
chemotherapy and when Grouped Property Services stopped paying her
they struggled to survive," Justice Katzmann said.

Justice Katzmann found that many workers had to borrow to meet
household expenses and at least one went without food.

One international student was forced to return home because he
could not meet his expenses or afford to apply for another visa,
while another student could not afford furniture and was forced to
quit because he could not drive to various worksites after being
unable to afford to renew his car registration.

Another worker struggled to pay bills and rent.

Justice Katzmann described Rosario Pucci's treatment of various
workers as being "inexcusable", "disgraceful", "reprehensible" and
"shameful".

Justice Katzmann found Rosario Pucci threatened one Colombian
student with deportation, forcibly removed another international
student from Grouped Property Services' office and told an Italian
student who asked for outstanding wages to "kiss my a…".

Justice Katzmann said Rosario Pucci had "a history of
offending", had been uncooperative with the Fair Work Ombudsman and
shown no contrition.

Justice Katzmann found that the "deeply troubling" evidence
presented by the Fair Work Ombudsman demonstrates that Grouped
Property Services had last year engaged a Colombian student as a
'contractor' - despite the fact the student was "undoubtedly an
employee" - and then gave her "the run around" for several months,
before finally paying her earlier this year.

In addition to the penalties, back-pay order and injunction, the
Fair Work Ombudsman also secured Court Orders requiring Grouped
Property Services to commission a professional external audit of
its payment practices and rectify any underpayments discovered. The
company must also commission training on workplace relations laws
for its managers.

The Fair Work Ombudsman also has a current application before
the Federal Court for Grouped Property Services to be liable for
legal costs.

The Fair Work Ombudsman has previously made one referral to the
Australian Securities and Investments Commission (ASIC) in relation
to the conduct by Grouped Property Services and associated
companies - and Justice Katzmann ordered that her judgment be
forwarded to ASIC and the Australian Taxation Office for their
consideration.

Ms James says her Agency has devoted significant time, resources
and legal expertise to ensure Grouped Property Services employees
were back-paid their lawful entitlements and the company was held
liable for completely unacceptable contraventions of workplace
laws.

"Those rogue employers in Australia who think they can build
businesses around the blatant exploitation of vulnerable workers
need to get the message that we will pursue you to the full extent
of the law, ensure you receive the punishment you deserve and
destroy your unlawful business model," Ms James said.

Ms James says the involvement of visa-holders from non-English
speaking backgrounds was also an aggravating feature of the
matter.

"Overseas workers can be vulnerable if they are not fully aware
of their rights or are reluctant to complain, so we treat such
cases very seriously," she said.

"The penalties imposed against this rogue operator are another
blow in the fight to stamp out the problem of deliberate
exploitation of overseas workers in Australia."